HOME INSURANCE CO. V. DICK, 281 U. S. 397 (1930)

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U.S. Supreme Court

Home Insurance Co. v. Dick, 281 U.S. 397 (1930)

Home Insurance Co. v. Dick

No. 232

Argued February 27, 1930

Decided May 5, 1930

281 U.S. 397


A contract of fire insurance issued by a Mexican company, made and to be performed in Mexico, and covered in part by reinsurance effected there or in New York with New York companies licensed to do business in Texas, was assigned by the insured to a citizen of Texas who was present in Mexico when the policy issued and continued to reside there until after a loss had occurred. He then returned to Texas and sued on the policy in a Texas Court naming the Mexican company, which was never present in Texas and did not appear, as principal defendant, and the two New York companies, because of their reinsurance liability, as garnishees. The policy stipulated that no suit should be brought under it unless within one year of the loss, but a defense based on this was overruled by the Texas Supreme Court, and recovery against the garnishees affirmed, by applying a Texas statute which forbade any agreement limiting the time for suit to a shorter period than two years

Page 281 U. S. 398

and declared that no agreement for such shorter limitation should ever be valid in that state.


1. The objection that, as applied to contracts made and to be performed outside of Texas, the statute violates the federal Constitution, raises federal questions of substance, and the existence of the federal claim is not disproved by saying that the statute, or the one-year provision in the policy, relates to the remedy, and not to the substance. P. 281 U. S. 405.

2. That the federal questions were not raised in the trial court is immaterial, since the Court of Civil Appeals and the supreme court of the state considered them as properly raised in the appellate proceedings and passed on them adversely to the federal claim. P. 281 U. S. 407.

3. The case is properly here on appeal, and petition for certiorari is therefore denied. Id.

4. The statute as construed and applied deprives the garnishees of property without due process of law, since the state was without power, under the circumstances, to affect the terms of the insurance contract by imposing a greater obligation than that agreed upon and to seize property in payment of the imposed obligation. Id.

5. When the parties to a contract have expressly agreed upon a time limit on their obligation, a statute which invalidates the agreement and directs enforcement of the contract after that time has expired increases their obligation and imposes a burden not contracted for. P. 281 U. S. 408.

6. The statute, as here involved, is not one dealing with remedies and procedure merely; it purports to create rights and obligations. P. 281 U. S. 409.

7. Assuming that a state may properly refuse to recognize foreign rights that violate its declared policy, or restrict the conduct of persons within its limits, this does not mean that it may abrogate the rights of parties beyond its borders having no relation to anything done or to be done within them. P. 281 U. S. 410.

15 S.W.2d 1028 reversed.

Appeal from a judgment of the Supreme Court of Texas affirming a judgment of the Court of Civil Appeals, 8 S.W. 2d 354, which affirmed recoveries against the appellants in garnishment proceedings ancillary to an action on a fire insurance policy.

Page 281 U. S. 402

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